Pakistan’s Economic Coordination Committee has approved major revisions to the Mera Ghar Mera Aashiana housing finance programme, increasing the maximum mortgage limit to Rs10 million in an effort to expand access to affordable housing across the country. The decision was taken during a meeting chaired by the federal finance minister in Islamabad, where officials reviewed the performance of the low cost housing initiative and approved several structural changes designed to accelerate financing for residential construction. The revised framework aims to make housing finance more accessible to middle income households while encouraging construction activity that could stimulate employment and economic growth.

Loan Limit Increased to Expand Housing Access

The revised policy raises the maximum financing limit available to applicants under the housing scheme from previous levels to Rs10 million. The change significantly increases the purchasing power of potential homeowners, particularly in major cities where rising property prices have made home ownership increasingly difficult for middle class families.

Under the updated framework, the scheme will support financing for residential units up to ten marlas in size or apartments measuring up to approximately 1,500 square feet. The expansion of eligible housing sizes is expected to widen the range of properties that can be purchased through subsidised mortgage financing.

Officials said the programme is designed to finance approximately 500,000 housing units over the next four years, reflecting the government’s ambition to reduce Pakistan’s housing shortage while supporting the broader construction sector.

Markup Rate Reduced to 5 Percent

Another major revision approved by the ECC involves a reduction in the markup rate applied to housing loans under the scheme. The interest rate has been standardised at 5 percent, down from the previous 8 percent, making housing loans significantly more affordable for borrowers.

The revised pricing structure is expected to reduce monthly mortgage payments and encourage a larger number of applicants to participate in the scheme. Government officials said previously disbursed loans will also be adjusted to the new markup rate to ensure consistency across all beneficiaries.

Financial authorities believe the lower financing cost will increase participation in the programme and expand the number of families able to secure housing through bank financing.

Strong Public Response to Housing Scheme

Officials reported that the housing finance initiative has already generated strong public interest since its launch. Banks participating in the programme have received more than 10,594 loan applications, reflecting demand for affordable housing finance across the country.

So far, 344 loans valued at approximately Rs810 million have been disbursed to successful applicants. With the revised loan limit and reduced markup rate, authorities expect a significant increase in loan approvals over the coming months.

The housing finance programme operates through the State Bank of Pakistan, which oversees the implementation framework and coordinates with commercial banks responsible for processing loan applications.

Construction Sector Expected to Benefit

Economic planners believe the revised housing finance scheme could stimulate growth in Pakistan’s construction sector by increasing demand for new housing units. The construction industry plays a vital role in the national economy due to its strong linkages with multiple sectors including cement, steel, building materials, transport, and labour.

Increased housing construction can generate employment opportunities while supporting economic activity in related industries. By expanding access to mortgage financing, the government hopes to encourage private developers and housing societies to accelerate residential development projects.

The programme also includes a mark up subsidy and risk sharing mechanism designed to reduce lending risk for banks while maintaining affordable financing conditions for borrowers.

Additional Development Funding Approved

Alongside the housing finance revisions, the ECC also approved funding support for several other development initiatives. A technical supplementary grant was approved for a national agricultural programme aimed at improving productivity in rain fed areas of Pakistan.

The committee also approved financial support for the Thar coal rail connectivity project, which is intended to improve the transportation of locally produced coal to power plants and industrial facilities. The rail project is expected to strengthen energy supply by reducing dependence on imported fuels.

Outlook for Housing Development

The revised housing finance framework is expected to increase mortgage lending and accelerate residential development activity in the coming years. By expanding loan limits and lowering financing costs, the government aims to improve home ownership opportunities while stimulating construction activity.

If implementation progresses as planned, the programme could become a major driver of housing development and economic activity across Pakistan.